A playbook for Generating Business Ideas

Why Not Start a Business? (Here’s Why Startups are
So Hard!)
Don’t worry, this chapter is not intended to discourage you from
entrepreneurship! It’s mostly just to make you aware of the challenges so that
you know what you’re getting into. It’s also to highlight some problems that
perhaps you could find a way to solve. As discussed previously, and we will
address it again in greater detail later in this book, a solution to a problem can
make for a great business idea.
Myself and others have written previously about a thesis on how technology is
enabling a new wave of entrepreneurship and innovation. However, there are
still many challenges that people face if they want to become self-employed,
which presents opportunity for entrepreneurs and investors. Below are some of
those challenges. I think that solving for these challenges could make for some
valuable companies.
1. Sales
Starting and growing a business requires getting access to customers and selling
them a product or service. Many people HATE selling, and it can be really hard
and time-consuming. Companies that provide distribution or access to
customers, such as marketplaces, could help solve for this.
2. Skill sets
Managing a business requires skill sets and knowledge in many different areas
including human resources issues, financial management, marketing, etc.
Companies that help people hire and recruit the skill sets they don’t have, such
as oDesk, could be valuable here, as well as anything that could help simplify or
automate managerial tasks, such as what Quickbooks did for accounting.
3. Fear

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Starting a business is risky and scary. If you’re on your own and there is failure,
there is no one else to take the blame except yourself. This one is probably hard
to solve with technology, hah. But part of the fear is financially driven. The area
that’s of particular interest to me is the student loan debt problem. People can’t
afford to take the risk of uncertain income if they have to make payments on
their student loan. There’s over a trillion dollars in student loan debt and a lot of
people are affected by it, so I think any business that can help people with their
student loans could be valuable.
4. Capital
Many, but not all, businesses require startup or growth capital. I think there
could be opportunity for a fund that serves businesses that don’t aim to be worth
a billion dollars but could still be worth 25 or 50 million, and/or throw off
substantial cash flow. Definitely seems underserved – there wouldn’t be much
competition like there is in big VC. Companies like Funding Circle are also
really interesting here.
5. Product development
Technology and product development will of course be a part of any tech
enabled business. As discussed, there have already been many advances here,
but I think there’s still plenty of opportunity for improvement. I imagine there’s
a market for just about anything that could reduce the cost, time, or learning
curve of building technology.
I suspect these are some of the reasons why people don’t become self-employed,
and the challenges they face if they do. If you believe this will be a growing
market opportunity, then I think solving for the pain points associated with it
could create a ton of value.
6. Uncertainty
As an entrepreneur, you face a lot of uncertainty. There’s uncertainty about
whether or not you will be able to identify a problem or solve it. There’s

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uncertainty that customers will want your product. There’s uncertainty about
how and if you will be able to acquire customers. There’s uncertainty about
whether you can supply your product at a lower cost than how much you can sell
it for, and turn a profit. And the list goes on. Not knowing what the future holds
can cause a lot of anxiety.
7. High risk
Startups are extremely risky. Most startups fail. Almost all startups fail. There is
a very high likelihood that you will fail too. You could be putting money, time,
and/or your professional reputation at risk when starting a company.
8. Rejection
As you go about starting a company, you will inevitably face rejection. Not
every customer will want your product. Not every investor will want to fund
you. Not every potential partner or employee will accept your offer. And the list
goes on.
One of my favorite quotes of all time is, “If you aren’t getting rejected on a daily
basis, your goals aren’t ambitious enough.” This was said by Chris Dixon, a
highly successful entrepreneur and venture capitalist. I love that philosophy.
I’ve always had ambitious goals in both my professional and personal life.
Sometimes to the point of being flat out unrealistic. Being ambitious and taking
action will inevitably lead to rejection. It’s simple math. However, getting
rejected is not a bad thing. It needs to be reframed as a good thing.
Getting rejected will thicken your skin. I’ve been rejected enough times to not be
nearly as afraid or affected by it. I almost try to take pride in getting rejected. It
means I’m pushing myself - as I should be. Trying and getting rejected is much
better than not trying at all. You can’t accomplish anything without trying. At
least when you try, you have a chance to succeed.
Getting rejected is a learning opportunity. One of the best ways to learn is by
doing. Sometimes it takes some trial and error to learn what’s best. After getting

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rejected, you can take the opportunity to analyze what you’ve done and see what
went wrong and what you can improve upon.
I don’t particularly like the quote, “There is no knowledge that is not power,” by
Ralph Waldo Emerson. I prefer Napoleon Hill’s, “Knowledge is only potential
power. It becomes power only when, and if, it is organized into definite plans of
action and directed to a definite end.” Studying and preparation are important,
but at a certain point enough is enough, and it’s time to go out and do. Taking
action too soon can of course lead to failure, but it is essential to take action
eventually.
Getting rejected is not fun. It’s demeaning. But it’s a learning experience and it
makes you stronger. If you let it immobilize you, you will continue to fail. And
if you’re not getting rejected, you’re probably not pushing yourself enough.
9. Nonconformity
Most people don’t start companies. Most people are employees, not
entrepreneurs. By even attempting to start a business you differentiate yourself
from the masses of people who work for businesses instead.
I’ve grown as a person tremendously as a result of becoming an entrepreneur. It
has affected my personal life as well. In addition, I’ve noticed people view me
differently not only because of the “label” I have as an entrepreneur, but because
of how my personality and outlook on life have changed as a result of become an
entrepreneur. Some people admire it, others are intimidated by it, and even some
look down on it. It’s led me to become closer to some groups of people, yet
becoming more isolated from other groups of people.
The nonconformist aspect of entrepreneurship is a very complex topic that I
could probably write a book, or at least a long blog post, about. The bottom line
about this is that by starting a company, you will instantly become a
nonconformist. This has both costs and benefits.

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